Ava School of Learning obtained a charter at the start of the year that authorized $50,000$ shares of no$-$par common stock and $20,000$ shares of preferred stock, par value $$10.$ During the year, the following selected transactions occurred:

a$.$ Collected $$40$ cash per share from four individuals and issued $5,000$ shares of common stock to each.

b$.$ Issued $6,000$ shares of common stock to an outside investor at $$40$ cash per share.

c$.$ Issued $8,000$ shares of preferred stock at $$20$ cash per share.

Required:

Prepare the journal entries indicated for each of these transactions.

Prepare the stockholders' equity section of the balance sheet at December $31.$ At the end of the year, the accounts reflected net income of $$36,000.$ No dividends were declared.

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Required $1$

Prepare the stockholders' equity section of the balance sheet at December $31.$ At the end of the year, the accounts reflected net income of $$36,000.$ No dividends were declared.

$\backslash$table$[[$AVA SCHOOL$],[$Balance Sheet $($Partial$),],[$At December $31,],[$Stockholders$\text{'}$ Equity,$],[$Preferred Stock,$],[$Common Stock,$],[$Comitional Paid$-$In Capital, Preferred Stock,$]]$